>>> It's not like I've never heard of [the concept of natural monopolies].

You have the benefit of the doubt from me, but your specific arguments leave out the installation phase of the electrical grid, which I'm sure you are very familiar with.

>>>First, there are many large companies that could raise the necessary capital to build power plants and electric transmission lines.

Agree, but capital isn't the only thing. You have to put the electrical lines into the ground, disrupting traffic. The costs and capital of the electrical system are not what makes it a natural monopoly, the physical reality of our current technology does (pending wireless transmission as you mention later).

The current physical reality is solved by having the government own the last mile(for some definition of mile), while electrical providers can connect at hubs. This is how it works in places where the population understands the specifics of natural monopolies.

>>>Third, having deregulated electricity systems would open up the field to innovation, such that we'd probably all have small nuclear reactors at our houses, or wireless power transmission, or something.

The biggest problem is that these technologies do not yet exist. Maybe in the future they will be stymied by regulation, but if they were invented today I can't think of an electrical grid regulation that would stop them. Remember, consumers can hook up power generating technology to the grid already: solar panels.

>>>Second, people can always get together and form a non-profit power company if the normal market isn't providing stable, competitive prices. (By "people" I mean, say, the people of an entire US state.)

Businesses are in the business of making money. When a corporation thinks it can make money by suing municipalities that form broadband networks, they do so. Like in Lafayette.

http://www.broadbandreports.com/shownews/60150 http://usatoday30.usatoday.com/news/nation/story/2012-02-01/...

Want to know why this isn't all over the news, with the competing ISPs and cable companies badmouthing these bad corporate actions? Because the cable companies and the ISPs and the media companies are largely owned by the same people, and collude monopolistically. This is a very recent accomplishment: regulations existed to prevent it but were overturned by the deregulation achieved through the Telecommunications Act of 1996.

http://en.wikipedia.org/wiki/Telecommunications_Act_of_1996 http://en.wikipedia.org/wiki/Concentration_of_media_ownershi...